The Role of Social Capital in the Management of B2B Professional Service Outsourcing Triads : A Critical Perspective

The trend in the outsourcing of services is gathering pace. This presents significant challenges for purchasing professionals. The management of these complex interactions is crucial to their on-going success, yet there is little guidance on what facilitates or indeed inhibits the effective and efficient management of these service interactions. We address this problem through applying the theoretical lens of social capital to understand the complexities of this process. We conduct a qualitative study of five service outsourcing triads of various levels of complexity and relationship length, embedded in the context of a multinational bank. We contribute to the debate on service outsourcing triads by examining how geographical scope, service complexity and the length of the relationship influence the management of social capital. Secondly, we explore the concept of social capital dissonance in service-outsourcing triads and examine how it affects the sourcing and service performance. Building on this, we develop four types of B2B service outsourcing configurations: transactional, locked-in, missed opportunity and collaborative. We also identify advantages and challenges for managing social capital for each type of relationship. Lastly, we submit that 'linking' social capital is more effective in recovering sourcing failures, while 'bridging' social capital is more effective in recovering service failures